Their payout mirrors what they’ll pay over the year, but several banks paid in full during the first quarter. The European Central Bank’s rate increase allowed lenders to extend the loans they had requested. Still, some institutions, notably Unicaja and Banco Sabadell, which do most of their business in Spain, reported first-quarter results that lagged behind more internationally oriented peers like Santander or BBVA. The banks themselves had warned in February that 2023 tax would total around 1.1 billion euros.
The ECB softened the rate hike to 0.25 points, but signals more is coming.
In the case of Unicaja and Sabadell, the impact of the extraordinary tax is clear and even more pronounced given their heavy exposure to Spain, according to analyst Joaquín Robles from XTB. Unicaja earned 34 million euros in the first three months of the year, down 43.3 percent from the same period a year earlier. The government paid its tax and would have posted 98 million more without it. Banco Sabadell, for its part, reported a quarterly profit of 205 million from January to March, down 4 percent year over year. After paying 157 million in tax, Sabadell’s annualized profit would rise by 69.4 percent to about 361 million if the tax were not a factor.
“The main banks’ results are positive and aligned with market expectations given the current rate environment. Yet the bank tax dented these results by absorbing a portion of net profits,” says IG analyst Diego Morín. He notes about 800 million in total. “Banco Santander earned 2,571 million in profit and paid around 224 million in taxes, a figure similar to BBVA. Sabadell paid roughly 150 million,” Morín adds.
For BBVA, first-quarter profit reached 1,846 million through March, helped by higher interest income in Mexico and Spain, with a rise of 39.4 percent from the prior year. The government’s extraordinary tax amounted to 225 million. Bankinter posted 184.7 million in March, up 19.7 percent from the previous year, with 77 million paid for the state tax.
banking turmoil
The U.S. financial turmoil after the failures of three banks and the takeover of Credit Suisse by UBS in Switzerland unsettled the sector across Europe. Diego Morín notes that the unease remains a hurdle for the industry and that further bankruptcies are not off the table given balance-sheet pressures in American banks. The rescue of First Republic Bank by JPMorgan Chase after the March collapses of Silicon Valley Bank and Signature Bank stoked fears of broader contagion in markets. Robles adds that while quarterly bank results were solid, the macro slowdown complicates earnings prospects. Lending has cooled, and lenders will need to provision for potential increases in defaults.
Despite the volatility, the six‑month outlook remains cautiously optimistic. Intermediary margins have improved and should rise further with the latest rate hikes. Corporations have already paid the extraordinary tax, contributing to a more favorable near-term view, according to Oscar Martínez, Deputy Portfolio Director at Norbolsa, who remains positive about the banking sector through the coming months.